<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED
MARCH 31, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM
____________ TO ___________
Commission file number: 0-28212
SUNQUEST INFORMATION SYSTEMS, INC.
(Exact name of registrant as specified in its charter)
PENNSYLVANIA 86-0378223
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification Number)
4801 East Broadway Boulevard
Tucson, Arizona 85711
(Address of principal executive office) (Zip Code)
(520) 570-2000
(Registrant's telephone number, including area code)
Not Applicable
(Former name, former address, and former fiscal year, if changed
since last report)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days. [ X ] Yes [ ] No
On May 10, 1999, there were 15,403,213 shares of Common Stock
outstanding.
<PAGE>
Sunquest Information Systems, Inc.
Form 10-Q
For the Quarterly Period Ended March 31, 1999
Table of Contents
Page
----
Part I. Financial Information
Item 1. Financial Statements
(a.) Condensed consolidated balance sheets as 3
of March 31, 1999 (unaudited) and December 31,
1998
(b.) Unaudited condensed consolidated 4
statements of income and comprehensive income
for each of the three month periods ended
March 31, 1999 and March 31, 1998
(c.) Unaudited condensed consolidated 5
statements of cash flows for each of the three
month periods ended March 31, 1999 and March
31, 1998
(d.) Notes to unaudited condensed consolidated 6
financial statements
Item 2. Management's Discussion and Analysis of 8
Financial Condition and Results of Operations
Item 3. Quantitative and Qualitative Disclosures About 13
Market Risk
Part II. Other Information
Item 1. Legal Proceedings 14
Item 2. Changes in Securities and Use of Proceeds 14
Item 3. Defaults Upon Senior Securities 14
Item 4. Submission of Matters to a Vote of Security 14
Holders
Item 5. Other Information 14
Item 6. Exhibits and Reports on Form 8-K 14
(a.) Exhibits 14
(b.) Reports on Form 8-K 14
Signatures 15
2
<PAGE>
Part I. Financial Information
Item 1. Financial Statements
Sunquest Information Systems, Inc.
Condensed Consolidated Balance Sheets
(In thousands)
<TABLE>
<CAPTION>
March 31, December 31,
1999 1998
--------- ------------
(unaudited)
<S> <C> <C>
ASSETS
Cash and cash equivalents $ 11,419 $ 7,057
Short-term investments 29,083 27,283
Trade receivables, net 39,443 40,302
Other current assets 2,112 2,107
Deferred tax assets 1,473 1,473
-------- --------
Total current assets 83,530 78,222
Property and equipment, net 9,672 10,246
Capital leases from related party, net 3,106 3,304
Software development costs, net 11,103 11,146
Other assets, net 1,257 1,326
-------- --------
Total assets $108,668 $104,244
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable $3,363 $3,721
Accrued compensation and related taxes 5,743 4,599
Accrued expenses 6,889 6,141
Obligations under capital leases,
primarily from related party 943 917
Deferred revenue 14,620 13,266
Deferred income taxes 114 115
Other liabilities - 1,000
-------- --------
Total current liabilities 31,672 29,759
Obligations under capital leases
from related party 3,915 4,163
Deferred income taxes 2,128 2,128
Shareholders' equity
Common stock 50,641 50,616
Retained earnings 20,582 17,692
Accumulated other comprehensive loss (270) (114)
-------- --------
Total shareholders' equity 70,953 68,194
-------- --------
Total liabilities and
shareholders' equity $108,668 $104,244
======== ========
</TABLE>
See accompanying notes.
3
<PAGE>
Sunquest Information Systems, Inc.
Condensed Consolidated Statements of Income and Comprehensive Income
(In thousands, except per share amounts)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
------------------
1999 1998
-------- --------
<S> <C> <C>
Revenues:
System sales $14,542 $15,706
Support and service 18,178 12,908
------- -------
Total revenues 32,720 28,614
------- -------
Operating expenses:
Cost of system sales 6,463 7,892
Client services 9,428 7,863
Research and development 4,099 3,883
Sales and marketing 4,390 3,797
General and administrative 4,310 3,501
Gain on sale of assets (681) -
------- -------
Total operating expenses 28,009 26,936
------- -------
Operating income 4,711 1,678
Other income (expense):
Interest income 321 275
Interest expense (318) (296)
Other (109) (50)
------- -------
Income before income taxes 4,605 1,607
Income tax provision 1,715 680
------- -------
Net income $ 2,890 $ 927
Other comprehensive (loss) income,
net of tax:
Foreign currency translation
adjustment (153) 38
Unrealized gain on securities
available-for-sale (3) -
------- -------
Comprehensive income $ 2,734 $ 965
======= =======
Net income per share:
Basic and diluted $.19 $.06
======= =======
Weighted-average shares outstanding:
Basic 15,394 15,376
======= =======
Diluted 15,512 15,394
======= =======
</TABLE>
See accompanying notes.
4
<PAGE>
Sunquest Information Systems, Inc.
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
------------------
1999 1998
-------- --------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 2,890 $ 927
Adjustments to reconcile net income to
net cash provided by operating
activities:
Depreciation and amortization 2,005 1,962
Bad debt expense 257 86
Deferred revenue 1,354 (298)
Deferred income taxes (1) 157
Gain on sale of assets (681) -
Changes in operating assets and
liabilities, net of acquisition:
Receivables 602 2,357
Inventory (69) 310
Prepaid expenses and other 4 (115)
Other assets 63 (49)
Accounts payable (358) (1,079)
Accrued compensation and related taxes 1,144 831
Other accrued expenses 1,845 282
------- -------
Net cash provided by operating activities 9,055 5,371
------- -------
Cash flows from investing activities:
Purchase of property and equipment (283) (655)
Costs related to acquisitions (1,097) (624)
Capitalized software development costs (1,910) (1,739)
Purchase of investments (11,354) -
Proceeds from sale or maturity of investments 9,551 -
Proceeds from sale of assets 750 -
------- -------
Net cash used in investing activities (4,343) (3,018)
------- -------
Cash flows from financing activities:
Principal payments on capitalized leases,
primarily from related party (222) (187)
Net proceeds from employee stock purchase plan 25 40
------- -------
Net cash used in financing activities (197) (147)
------- -------
Foreign currency translation adjustment (153) 38
------- -------
Net increase in cash and cash equivalents 4,362 2,244
Cash and cash equivalents at beginning of period 7,057 23,692
------- -------
Cash and cash equivalents at end of period $11,419 $25,936
======= =======
</TABLE>
See accompanying notes.
5
<PAGE>
Notes to Unaudited Condensed Consolidated Financial Statements
Note 1 - Interim Statement Presentation
The unaudited condensed consolidated financial statements of
Sunquest Information Systems, Inc. (the "Company") have been
prepared by the Company pursuant to the rules and regulations of
the Securities and Exchange Commission (the "Commission") and in
accordance with generally accepted accounting principles for the
preparation of interim financial statements. Accordingly,
certain information and footnote disclosures normally included in
annual financial statements have been omitted or condensed.
These unaudited condensed consolidated financial statements
should be read in conjunction with the consolidated financial
statements and the notes thereto incorporated by reference into
the Company's 1998 Annual Report on Form 10-K filed with the
Commission. The 1998 balance sheet amounts were derived from
audited statements.
In the opinion of management, all necessary adjustments have been
made to provide a fair presentation to the unaudited financial
information. The operating results for the three months ended
March 31, 1999 are not necessarily indicative of the results that
may be expected for any other interim period or for the full year
ending December 31, 1999.
Note 2 - Employee Stock Purchase Plan
In the three months ended March 31, 1999, the Company issued
2,087 shares of its Common Stock for approximately $25,000
pursuant to the Employee Stock Purchase Plan.
Note 3 - Taxes
The effective income tax rates are based upon the relationship of
annual forecasted income and income taxes. To the extent that
these rates differ from the federal statutory rates, the cause is
primarily related to tax exempt investment earnings and state
income taxes.
6
<PAGE>
Note 4 - Net Income Per Share
The following table sets forth the computation of basic and
diluted net income per share:
Three Months Ended
March 31,
----------------------
1999 1998
---------- ---------
Numerator for basic and diluted net
income per share:
Net income $2,890,000 $927,000
========== ==========
Denominator:
Denominator for basic net income per
share -- weighted-average shares 15,394,483 15,376,012
Effect of diluted securities:
Stock options 117,209 18,264
---------- ----------
Denominator for diluted net income
per share -- adjusted weighted-
average shares 15,511,692 15,394,276
========== ==========
Basic net income per share $.19 $.06
==== ====
Diluted net income per share $.19 $.06
==== ====
Note 5 - Investments
The Company accounts for its investments in Tax Exempt Municipals
and Short-term Demand Notes based on Statement of Financial
Accounting Standards No. 115, "Accounting for Certain Investments
in Debt and Equity Securities," ("SFAS No. 115"). SFAS No. 115
provides the accounting and reporting requirements for
investments in securities that have readily determinable fair
values and for all investments in debt securities. At March 31,
1999, all of the Company's investments in debt securities have
been classified as available-for-sale securities. Available-for-
sale securities are carried at fair value with net unrealized
gains and losses on such securities, net of tax, reported as a
component of shareholders' equity. At March 31, 1999, unrealized
gains on investments available-for-sale were approximately
$2,300, net of tax, and reflected in shareholders' equity and
other comprehensive income.
7
<PAGE>
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Forward-Looking Statements
- --------------------------
This report, and other reports and communications to
shareholders, contains forward-looking statements, including
statements which contain words such as "will," "expects,"
"believes," "plans," "anticipates" and words of similar impact.
Certain risk factors, including but not limited to dependence on
laboratory information system products, competition in the
marketplace, Year 2000 readiness of the Company's products and of
other vendors' products utilized by the Company, purchase and
installation decisions of customers, pricing decisions of
competitors, changes in regulatory requirements, and product
status and development risks and uncertainties could cause actual
results to differ materially from such forward-looking
statements. These and other risks are detailed in the Company's
1998 Annual Report on Form 10-K filed with Securities and
Exchange Commission.
General
- -------
Sunquest Information Systems, Inc. (the "Company") designs,
develops, markets, installs and supports health care information
systems for large and mid-sized hospitals, clinics and other
facilities, including integrated delivery networks. Revenues are
derived from the licensing of software, the provision of value-
added services and the sale of related hardware.
During the quarter ended March 31, 1999, the Company sold
its Enterprise Master Person Index ("EMPI") product to New Era of
Networks, Inc. ("NEON") for net proceeds of approximately
$750,000. The pre-tax gain resulting from the sale was
approximately $681,000. The after-tax gain was approximately
$429,000, or $.03 per basic and diluted share. The sale of the
EMPI product is consistent with the Company's strategy and focus
on its clinical suite of products.
Three Months Ended
March 31,
------------------
1999 1998
-------- --------
Diluted net income per share
excluding gain on sale of assets $0.16 $0.06
Gain on sale of assets 0.03 -
----- -----
$0.19 $0.06
===== =====
The results of operations for the three months ended March
31, 1999 are not necessarily indicative of the results that may
be expected for any other interim period or for the full year
ending December 31, 1999.
8
<PAGE>
Year 2000 Compliance
- --------------------
The Year 2000 issue is the result of computer programs being
written using two digits rather than four to define the
applicable year. Any of the Company's software programs, whether
sold as products of the Company or used internally, may recognize
a date using "00" as the year 1900 rather than the Year 2000.
This could result in a system failure or miscalculations causing
disruptions of operations, including, among other things, a
temporary inability to process transactions, send invoices, or
engage in similar normal business activities.
Based on a current assessment, the Company believes that all
of the current releases of its products are Year 2000 compliant.
The Company plans to release a Year 2000 compliant version of its
IntelliCare software in October of 1999 for the one customer
using the IntelliCare system. The Company plans to have all
clients converted to Year 2000 compliant versions of its products
by October 1999. Pursuant to contract terms, clients are
obligated to cooperate with the Company in the installation of
system enhancements, including the current Year 2000 compliant
versions. As of March 31,1999, approximately 96% of the
Company's clients were using or installing Year 2000 compliant
versions of its products.
The Company is also assessing the Year 2000 readiness of its
third-party suppliers and business partners. Although the
Company believes that these third-party suppliers and business
partners are taking appropriate action to ensure that their
products are, or will be, Year 2000 compliant, failure by such
suppliers and business partners to adequately address their Year
2000 readiness could affect the Company's business. The Company
continues to review the Year 2000 readiness of its third-party
suppliers and business partners.
Although the Company expects all of its products and systems
to be Year 2000 compliant and all clients to have installed Year
2000 compliant versions of its products before December 31, 1999,
it cannot predict with complete accuracy the outcome of its Year
2000 program. If its Year 2000 program is not successful or if
the systems of suppliers and clients material to the Company fail
or malfunction in the Year 2000, the Company's business,
financial condition or results of operations may be adversely
affected.
The Company has determined that a portion of software
programs developed by other vendors and utilized internally will
require upgrades to new versions to properly utilize dates beyond
December 31, 1999. After reviewing the plans of these vendors,
the Company believes that the upgrades to such software programs
will be completed by the fourth quarter of 1999. The cost of
Year 2000 compliant software related to systems developed by
other vendors and used internally is included in the related
software maintenance agreements. The Company believes that
consulting costs incurred in accomplishing the installation of
Year 2000 compliant software will be immaterial.
Efforts by clients to address their Year 2000 issues may
absorb a significant portion of their information technology
budgets in the near term and may cause them to either delay or
accelerate the purchase and implementation of new applications
and systems. While these purchasing decisions may increase
demand for certain of the Company's products and services,
9
<PAGE>
including its Year 2000 offerings, it could also decrease demand
for other offerings. However, based upon the existing customer
backlog at March 31, 1999, this risk has not manifested itself in
a reduction in the demand for the Company's products. The
outcome of these purchasing decisions could affect the Company's
revenues or change its revenue patterns.
Results of Operations
- ---------------------
Comparison of Three Months Ended March 31, 1999 and March 31, 1998
Revenues. The Company's total revenues were $32.7 million
for the three months ended March 31, 1999 compared to $28.6
million for the three months ended March 31, 1998, an increase of
$4.1 million, or 14.3%. Revenues from system sales were $14.5
million for the three months ended March 31, 1999 compared to
$15.7 million for the three months ended March 31, 1998, a
decrease of $1.2 million, or 7.4%. This decrease was primarily
attributable to decreases in hardware and operating system
deliveries partially offset by an increase in installations of
software. Revenues from support and service were $18.2 million
for the three months ended March 31, 1999 compared to $12.9
million for the three months ended March 31, 1998, an increase of
$5.3 million, or 40.8%. This increase was primarily attributable
to increased installation and fee-for-service activities and
growth in support services to the Company's installed customer
base.
At March 31, 1999, the Company had a total contract backlog
of $125.4 million, which consisted of $62.4 million of system
sales and services, and $63.0 million of support. The Company's
total contract backlog at December 31, 1998, was $122.0 million,
which consisted of $61.1 million of system sales and services,
and $60.9 million of support. At March 31, 1998, total contract
backlog was $96.7 million, which consisted of $43.2 million of
system sales and services, and $53.5 million of support.
Cost of System Sales. Cost of system sales was $6.5 million
for the three months ended March 31, 1999 compared to $7.9
million for the three months ended March 31, 1998, a decrease of
$1.4 million, or 18.1%. As a percentage of total revenues, cost
of system sales was 19.8% in 1999 compared to 27.6% in 1998. The
dollar decrease was primarily attributable to decreases in
hardware and operating system deliveries. Amortization of
previously capitalized software development costs was $884,000
for the three months ended March 31, 1999 compared to $827,000
for the three months ended March 31, 1998, an increase of
$57,000, or 6.9%. The increase in amortization was primarily
attributable to increased amortization of the Company's reference
laboratory product, partially offset by the sale of the Managed
Care Manager ("MCM") software product line during the second
quarter of 1998.
Client Services. Client services expenses were $9.4 million
for the three months ended March 31, 1999 compared to $7.9
million for the three months ended March 31, 1998, an increase of
$1.6 million, or 19.9%. As a percentage of total revenues,
client services expenses were 28.8% in 1999 compared to 27.5% in
1998. The dollar increase was primarily attributable
10
<PAGE>
to additional staff and outside consultants dedicated to support and
installation of the Company's systems and to providing consulting
services to customers.
Research and Development. Research and development expenses
were $4.1 million for the three months ended March 31, 1999
compared to $3.9 million for the three months ended March 31,
1998, an increase of $216,000, or 5.6%. As a percentage of
total revenues, research and development expenses were 12.5% in
1999 compared to 13.6% in 1998. The dollar increase in research
and development expenses was primarily attributable to legal and
professional fees associated with the submission to the United
States Food and Drug Administration of a 510(k) notification
related to the Company's Blood Bank product and to increased
staff dedicated to the development, enhancement and documentation
of the Company's Clinical Event Manager, laboratory and reference
laboratory systems partially offset by decreased expenses related
to the MCM product line and the IntelliCare suite of products.
The Company capitalized $910,000 of its software development
costs for the three months ended March 31, 1999 compared to
$739,000 for the three months ended March 31, 1998. The increase
in capitalized software development costs was primarily
attributable to increased capitalization for the Company's
clinical laboratory product partially offset by decreased
capitalization for reference laboratory and pharmacy products.
Sales and Marketing. Sales and marketing expenses were $4.4
million for the three months ended March 31, 1999 compared to
$3.8 million for the three months ended March 31, 1998, an
increase of $593,000, or 15.6%. As a percentage of total
revenues, sales and marketing expenses were 13.4% in 1999
compared to 13.3% in 1998. The dollar increase was primarily
attributable to increased advertising and marketing expense,
commissions resulting from sales bookings growth of nearly 100%
during the first quarter of 1999 as compared to the corresponding
period in 1998 and additional sales staff for the reference
laboratory products and the European market.
General and Administrative. General and administrative
expenses were $4.3 million for the three months ended March 31,
1999 compared to $3.5 million for the three months ended March
31, 1998, an increase of $809,000, or 23.1%. As a percentage of
total revenues, general and administrative expenses were 13.2% in
1999 compared to 12.2% in 1998. The dollar increase was
primarily attributable to increased variable compensation
relating to employee incentives, additional employees, legal fees
and contributions to the Company's Profit Sharing Plan.
Transition Costs. For the three months ended March 31,
1999, the Company paid previously accrued transition costs
established at the time of the acquisition of Antrim of $1.1
million as compared to $481,000 paid during the corresponding
period in 1998. These costs were associated with replacing
certain Antrim software products with Sunquest products. In
addition, during the three months ended March 31, 1998, the
Company paid transition costs related to the purchase of the
PreciseCare Medication Management System ("PreciseCare") of
$117,000. These costs were primarily associated with employee
costs and professional services related to the purchase.
11
<PAGE>
Liquidity and Capital Resources
- -------------------------------
At March 31, 1999, the Company had cash and short-term
investments of $40.5 million, which consisted of cash of $11.4
million and short-term investments of $29.1 million. This
compares to cash and short-term investments of $34.3 million at
December 31, 1998 and cash and cash equivalents of $25.9 million
at March 31, 1998, increases of $6.2 million and $14.6 million,
respectively. Cash provided by operating activities was $9.1
million for the three months ended March 31, 1999 compared to
$5.4 million for the three months ended March 31, 1998.
As of March 31, 1999, the Company had net trade receivables
of $39.4 million which consisted of $26.9 million in net billed
trade receivables and $12.5 million in unbilled trade
receivables. At December 31, 1998, the Company had net trade
receivables of $40.3 million which consisted of $25.0 million in
net billed trade receivables and $15.3 million in unbilled trade
receivables. Net trade receivables have decreased by $859,000
since December 31, 1998, with $2.8 million related to the
unbilled portion partially offset by an increase in net billed
trade receivables of $1.9 million. The unbilled receivables
represent revenue that has been recognized in accordance with the
percentage-of-completion accounting method, but which has not yet
been billed to customers under contractual milestone billings.
Generally, the unbilled amounts will be billed and collected
within the following twelve months. The Company maintains an
allowance for doubtful accounts that it believes is adequate to
cover potential credit losses. The average collection period, a
rolling twelve-month average, on net billed trade receivables was
68 days at March 31, 1999 compared to 69 days at December 31,
1998 and 92 days at March 31, 1998. Days sales outstanding
("DSO") was 108 at March 31, 1999 compared to 112 at December 31,
1998 and 107 at March 31, 1998.
Cash used in investing activities was $4.3 million for the
three months ended March 31, 1999. Purchases of investments
totaled $11.4 million and proceeds from the maturity or sale of
investments totaled $9.6 million. Capitalized software
development costs totaled $1.9 million. Of this amount, $1.0
million was related to the final payment under the Value Added
Reseller agreement with Dynamic Healthcare Technologies, Inc. for
the license of a software program known as CoPathPlus. Purchases
of property and equipment totaled $283,000 and consisted
primarily of purchases of computers and computer-related
equipment. Costs related to acquisitions totaled $1.1 million
and were primarily associated with replacing certain Antrim
software products with Sunquest products. In addition, the
proceeds from the sale of assets consisted of $750,000 from the
sale of the EMPI product to NEON.
Cash used in financing activities was $197,000 for the three
months ended March 31, 1999. Of this amount, $222,000 was used
for principal payments on capital leases. This amount was
partially offset by the issuance of 2,087 shares of the Company's
Common Stock for approximately $25,000 under the Employee Stock
Purchase Plan.
At March 31, 1999, working capital was $51.9 million
compared to $48.5 million at December 31, 1998.
12
<PAGE>
The Company has a revolving line of credit with a bank
allowing the Company to borrow up to $10.0 million. Any
borrowings under the line of credit will bear interest at the
bank reference rate unless the Company elects a fixed rate or
certain variable rates contemplated by the agreement. All
outstanding principal and interest under the line of credit is
due May 31, 1999 except for any amounts outstanding under stand-
by letters of credit which have a maximum maturity of 365 days.
Borrowings under the line of credit are secured by all of the
Company's assets. Approximately $440,000 of the line of credit
is used to secure a letter of credit and is not available for
immediate expenditure. There were no borrowings outstanding as
of March 31, 1999.
The Company has no significant purchase commitments at this
time. However, the Company continues to be actively involved in
identifying and evaluating potential acquisitions, which may
result in the future expenditure of funds.
Management believes that existing cash, cash equivalents,
short-term investments, cash available under its revolving line
of credit and funds generated from operations will be sufficient
to meet operating requirements for at least the next twelve
months.
To date, inflation has not had a material impact on the
Company's revenues or income, and the Company does not expect
inflation to have a material impact in the foreseeable future.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
The Company is exposed to market risk from changes in
interest rates. The Company's primary interest rate risk relates
to its short-term investments in Tax-exempt Municipals and Short-
term Demand Notes all of which are classified as available-for-
sale. At March 31, 1999, the Company had total short-term
investments of $29.1 million. Assuming a 10% increase in
interest rates on the Company's short-term investments (i.e., an
increase from the March 31, 1999 weighted-average interest rate
of 3.07% to a weighted-average interest rate of 3.38%), the fair
value of these investments would decrease by approximately
$520,000.
13
<PAGE>
Part II. Other Information
Item 1. Legal Proceedings
Not Applicable.
Item 2. Changes in Securities and Use of Proceeds
None.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Submission of Matters to a Vote of Security Holders
None.
Item 5. Other Information
None.
Item 6. Exhibits and Reports on Form 8-K
(a.) Exhibits
27.1 - Financial Data Schedule, filed herewith.
(b.) Reports on Form 8-K
A Current Report on Form 8-K, dated February 26,
1999, was filed by the registrant during the
quarter ended March 31, 1999 reporting Fourth
Quarter and Year-end 1998 Results, the status of
the Blood Bank Software Review by the United
States Food and Drug Administration and a new
Marketing Agreement for Mediware's Hemocare Blood
Bank Software.
14
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
SUNQUEST INFORMATION SYSTEMS, INC.
(Registrant)
Date: May 13, 1999 By: /s/ Nina M. Dmetruk
____________________________________________
Nina M. Dmetruk
Executive Vice President and Chief Financial
Officer
(Principal Financial and Accounting Officer)
15
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-1-1999
<PERIOD-END> MAR-31-1999
<CASH> 11419
<SECURITIES> 29083
<RECEIVABLES> 40576
<ALLOWANCES> 1133
<INVENTORY> 635
<CURRENT-ASSETS> 83530
<PP&E> 17401
<DEPRECIATION> 7729
<TOTAL-ASSETS> 108668
<CURRENT-LIABILITIES> 31672
<BONDS> 0
0
0
<COMMON> 50641
<OTHER-SE> 20312
<TOTAL-LIABILITY-AND-EQUITY> 108668
<SALES> 32720
<TOTAL-REVENUES> 32720
<CGS> 6463
<TOTAL-COSTS> 15891
<OTHER-EXPENSES> 4099
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 318
<INCOME-PRETAX> 4605
<INCOME-TAX> 1715
<INCOME-CONTINUING> 2890
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2890
<EPS-PRIMARY> .19
<EPS-DILUTED> .19
</TABLE>
